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METROPOLITAN FINANCIAL REPORTS STRONG FIRST QUARTER EARNINGS AND LARGE ONE TIME GAIN FROM ACCOUNTING CHANGE

 METROPOLITAN FINANCIAL REPORTS STRONG FIRST QUARTER EARNINGS
 AND LARGE ONE TIME GAIN FROM ACCOUNTING CHANGE
 MINNEAPOLIS, April 13 /PRNewswire/ -- Record levels of net interest income, the best Twin Cities residential real estate market in recent history, and a one time gain of $76,333,000 resulting from an accounting change contributed to the strongest quarterly results in the history of Metropolitan Financial Corporation (NYSE: MFC).
 Net income for the first quarter ended March 31, 1992, was $82,953,000, or $6.28 per fully diluted share, compared to $9,433,000, or $0.73 per fully diluted share for the same quarter in 1991. Net income before the cumulative effect of the accounting change was $6,620,000, or $0.48 per share. The accounting change is due to the company implementing Statement of Financial Accounting Standard Number 109, Accounting for Income Taxes (SFAS 109). Primary earnings per share for the quarter were $8.06 compared to $0.88 for the same quarter one year ago.
 Paul A. Lipetzky, president and chief operating officer of the regional thriftholding company, stated, "The implementation of SFAS Number 109 has two significant effects on our financial statements. First, it increases shareholders' equity by $76,333,000, or $5.80 per share, through the current recognition of Metropolitan's future tax benefits, and secondly, through the amortization of these benefits for financial reporting purposes, our ea&nings will now be reported on a fully tax effected basis." He went on to note that for the current quarter, income before taxes and the cumulative effect of the accounting change was $11,836,000 compared to $9,447,000 for the first quarter of 1991.
 Net interest income before the provision for credit losses was $32,459,000, compared to $23,540,000 for the first three months of 1991. Lipetzky attributed the nearly 38 percent increase to lower interest rates and the ongoing acquisition strategy of Metropolitan Federal Bank, the company's insured savings bank subsidiary, which has replaced wholesale borrowing with retail deposits and lowered the company's cost of funds. The net interest margin for the quarter was a record 2.94 percent, compared to 2.64 percent for the quarter ended Dec. 31, 1991 and 2.21 percent for the first quarter of 1991.
 Real estate sales commissions from the company's Edina Realty subsidiary totalled $5,777,000 compared to $4,233,000 for the first three months of 1991. Title closing fees at the company's Equity Title subsidiary were $2,176,000, compared to $1,412,000 a year ago. Gains on sales of mortgage loans, mortgage backed securities and investments were $459,000 for the most recent quarter, compared to $7,818,000 for the first quarter in 1991. Total noninterest income for the first quarter was $12,874,000, which is less than the $18,430,000 reported in the first quarter of 1991, due to the reduced level of asset sales.
 Lipetzky stated, "Edina Realty reported the highest quarterly sales volume in its history. The favorable real estate market and low interest rates led to mortgage loan originations of $300,159,000, also a record for the quarter for Metropolitan Federal Bank."
 Noninterest expenses for the quarter was $31,397,000, up slightly from the $30,523,000 reported one year ago due to recent acquisitions.
 The excellent loan production totals and the purchase of a $89 million consumer loan portfolio from the Resolution Trust Company increased the company's total assets to $5.0 billion, up from $4.7 billion at Dec. 31, 1991.
 Deposits increased from $3.8 billion at Dec. 31, 1991 to just under $4.0 billion at March 31, 1992. Approximately $73 million of the deposit increase came when the company acquired five branch offices of Monycor Savings Bank, Barron, Wis. on March 13, 1992 from the Resolution Trust Corporation. Despite the high volume of mortgage loan production, the company was again able to reduce its "gap," the industry's measure of interest rate risk. The negative gap at March 31, 1992 was 7.5 percent.
 Nonperforming assets were reduced to $94 million at the end of the quarter, compared to $108 million at December 31, 1991. Since terminating the Resolution Trust Corporation-administered 1988 assistance agreements in late 1991, the company's management has successfully pursued aggressive and market-driven asset disposition programs.
 On Feb. 18, 1992 the company announced that it has signed a definitive agreement to acquire St. Cloud-based Security Financial Group, a $260 million thrift holding company with nine branch offices in central Minnesota. Company officials expect the transaction to close late in the third quarter of the year.
 Norman M. Jones, the chairman of the company's board of directors, stated, "This first quarter is the strongest in our history from the standpoint of core operating earnings. Going forward we expect continued improvement in net interest income, outstanding performance by Edina Realty, record levels of loan originations, and growth in shareholders' equity. We will also continue to explore acquisition opportunities in and adjacent to our current markets."
 Metropolitan Financial Corporation is a regional financial services holding company. Its full service consumer savings bank, Metropolitan Federal Bank, fsb, Fargo, N.D., operates over 130 offices in 105 communities in the states of North Dakota, Minnesota, Iowa, South Dakota, Wisconsin and Arizona and meets all current and fully phased in regulatory capital requirements. Metropolitan is the Twin Cities' largest originator of residential mortgage loans.
 The corporation's real estate sales and brokerage subsidiary, Edina Realty, has been rated number 1 nationally in customer satisfaction by a leading consumer magazine and serves Minnesota and western Wisconsin. Equity Title Services, Inc. is the largest residential title company in the state of Minnesota.
 Metropolitan Financial Corporation's common stock trades on the New York Stock Exchange, under the symbol MFC. The Series B preferred stock and warrant trade on the NASDAQ System under the symbols MFCNP and MFCNW, respectively.
 METROPOLITAN FINANCIAL CORPORATION
 SELECTED FINANCIAL DATA
 (Dollar amounts in thousands, except per share data)
 Three Months Ended
 3/31/92 3/31/91
 Operations data
 Net interest income $32,459 $23,540
 Provision for credit losses 2,100 2,000
 Net gain on sale of assets 459 7,818
 Other noninterest income 12,415 10,612
 Noninterest expense 31,397 30,523
 Income taxes 5,216 14
 Income before accounting change 6,620 9,433
 Accounting change 76,333 --
 Net income $82,953 $9,433
 Net income per share
 Primary:
 Income per share before cumulative effect
 of accounting change $0.61 $0.88
 Cumulative effect of accounting change 7.45 --
 Net primary $8.06 $0.88
 Fully diluted:
 Income per share before cumulative effect
 of accounting change $0.48 $0.73
 Cumulative effect of accounting change 5.80 --
 Net fully diluted $6.28 $0.73
 Ratios (in percents)
 Return on average assets before
 accounting change 0.55
 Return on average assets 6.92 0.83
 Return on average equity before
 accounting change 7.79
 Return on average assets 97.60 16.19
 Average equity to average assets before
 accounting change 5.58
 Average equity to average assets 7.09 5.15
 Net interest margin 2.94 2.21
 Noninterest expense/average assets 2.62 2.70
 Nonperforming assets to total assets 1.87 1.68
 Financial Condition
 Total assets $5,018,437 $4,584,970
 Loans 2,592,342 1,904,852
 Deposits 3,973,098 3,781,677
 Shareholders' equity 360,535 233,569
 Nonperforming assets 94,041 77,152
 Book value per common share 27.99 19.38
 Tangible book value per common share 23.04 12.01
 Market value per common share 22.50 12.41
 Capitalization Metropolitan Federal Bank, fsb (in percent)
 Tangible capital 4.43 3.57
 Core capital 5.15 4.49
 Risk based capital 11.63 12.08
 -0- 4/13/92
 /CONTACT: Bill Bartkowski of Metropolitan Financial, 612-928-5000/
 /FIRST ADD -- ADDITIONAL TABULAR MATERIAL TO FOLLOW/ CO: Metropolitan Financial Corporation ST: Minnesota IN: FIN SU: ERN


AL -- MN019 -- 7959 04/13/92 17:09 EDT
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Date:Apr 13, 1992
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